Blockchain for Halal Industry E-Book

Hussein Elasrag

• Herausgeber: Hussein Elasrag
• Kategorie: Fachliteratur
• Sprache: Englisch

Veröffentlichungsjahr: 2022

Beschreibung

The global halal market has emerged as a new growth sector in the global economy and is creating a strong presence in developed countries. The halal industry has now expanded well beyond the food sector further widening the economic potentials for halal. This book aims to provide an introduction to applying Blockchain for halal supply chains and outline some potential areas for consideration for the all sectors of the halal industry. The book will help to deepen understanding of the concepts of Blockchain technology and halal industry and explores the concept of Halal industry along with the components which constitute the industry. The book Provides and discusses existing  halal supply chains usage of Blockchains... The opportunities and challenges in developing and Halal industry are also discussed...

Leseprobe

Blockchain for Halal Industry

Hussein Elasrag

©2019Hussein Elasrag

The global halal market has emerged as a new growth sector in the global economy and is creating a strong presence in developed countries. The halal industry has now expanded well beyond the food sector further widening the economic potentials for halal. This book aims to provide an introduction to applying Blockchain for halal supply chains and outline some potential areas for consideration for the all sectors of the halal industry. The book will help to deepen understanding of the concepts of Blockchain technology and halal industry and explores the concept of Halal industry along with the components which constitute the industry. The book Provides and discusses existing halal supply chains usage of Blockchains... The opportunities and challenges in developing and Halal industry are also discussed...

Contents

Introduction

TheHalalEconomyandTheMarketOpportunity

SegmentsoftheHalalMarket

Food

Pharmaceuticalandhealthproducts

Cosmetics

PharmaceuticalsandCosmeticsSector:KeyChallengesandOpportunities

TourismandTravel

The blockchain basis

Blockchain in Halal Supply Chains

The Challenges of Developing the Halal Industry

Opportunities

Problems

Challenges

References

Introduction

The blockchain technology is rapidly gaining the attention of Organizations of Islamic Cooperation. There are various Islamic financial institutes which are planning to use the blockchain system to bring the benefits that come with it.

In PwC’s 2018 survey of 600 executives from 15 territories, 84% say their organizations have at least some involvement with blockchain technology. Companies have dabbled in the lab; perhaps they’ve built proofs of concept. Everyone is talking about blockchain, and no one wants to be left behind. It’s easy to see why. As a distributed, tamperproof ledger, a well-designed blockchain doesn’t just cut out intermediaries, reduce costs, and increase speed and reach. It also offers greater transparency and traceability for many business processes. Gartner forecasts that blockchain will generate an annual business value of more than US $3 trillion by 2030. It’s possible to imagine that 10% to 20% of global economic infrastructure will be running on blockchain-based systems by that same year.

For the Islamic economy, blockchain technology has the potential to make a significant impact. The blockchain in Islamic finance and banking will surely help the Islamic banks, and financial institutes to succeed. Without worry about the interest and other such issues Islamic banking system will be able to work more productively.

Islamic financial institutions are increasingly using blockchain technology for complex financing terms, Shariah-compliant transactions and Islamic and sharia-compliant alternatives to conventional insurance. back-office automation, and underwriting of micro-insurance. Islamic finance can use cryptocurrencies for SMEs finance, underpinned by blockchain technology, to structure payments in an efficient and cost-effective manner.

The installation of blockchain in halal supply chains will primarily affect the way payments, remittances and trading activities are conducted. This technology is moving forward towards the mainstream and promises to provide benefits in several areas. It can:

•Modernize legal documentation through the application of smart contracts

•Significantly reduce transaction processing time

•Reduce costs for providers, and transaction fees for consumers

•Eliminate the need for documentation and manual reconciliation of transactions

•Reduce the need for centralized regulation

•Eliminate the risk of errors and duplication

•Reduce or eradicate fraud

•Manage counterparty risk

Blockchain’s core attributes mean that it has significant potential for use in Islamic finance due to its:

•Transparency: blockchain provides provenance, traceability and transparency of transactions

•Control: access to permissioned networks is restricted to identified users

•Security: the digital ledger cannot be altered or tampered with once the data is entered. Fraud is less likely and easier to spot

•Real-time information: when information is updated, it’s updated for everyone in the network at the same time

ItmustfirstbestatedthattheIslamicdietaryandconsumptionsystemisdifferentanduniquecomparedtootherethnicdietarysystems.TheworldcommunityhasnowbeguntounderstandtheimportanceoftheMuslimsrequirementforfoodandotherconsumptionknownashalal.Themarketforcertifiedhalalfoodandproductsisgrowingrobustly,bothdomesticallyandinternationally.Althoughthetermhalalhasneverattractedasmuchattentionasinrecenttimes,today,whereverthereareMuslimconsumerswhosetastesandpreferencesaregovernedbyhalalrulesonfoodspecification,ahalalfoodmarketexists.EveryMuslimmustensurethatwhattheyeatcomesfrom ahalalsource.Thisdoesnotmeanonlytochecktheingredientsperse,butalsotoensurethatthewholeprocessisinaccordancewithShariahprinciples.(Zakaria2008)

HalalisanArabicwordmeaninglawfulandpermitted.ThisHalalconceptcomesfromtheHolyQuranwhichitusestodescribeobjectsandactions. Islam isa natural way of lifeandencompassestheconceptof aneconomicsystembasedon humancooperation andbrotherhood,whichisbasedontheconsultationanddietarylawsforallhumanity.HalalconsistsofanythingthatisfreefromanycomponentthatMuslimsareprohibitedfromconsuming.Thiscanbeclassifiedas'porkfree'initsphysicalexistence,includingfoodsubstancessuchasgelatin,enzymes,lecithinandglycerinaswelladditivessuchasflavoringsandcoloring.(Zakaria 2008, HjHassan2013)

HalalisaQuranictermthatmeanspermitted,allowed,lawfulorlegal.Itsoppositeisharam(forbidden,unlawfulorillegal).AccordingtoShari’ah,allissuesconcerningHalalorHaramandevenalldisputesshouldbereferredtoQuranandSunnah.HalalandHaramareuniversaltermsthatapplytoallaspectsofhumanlifewhetherisrelatedtohisibadatormuamalatormua’sharah.Halalmaybedefinedasanact,objectorconductoverwhichtheindividualhasfreedomofchoiceand itsexercisedoesnotcarryeitherarewardorapunishment.HalalmayhavebeenidentifiedbyexplicitevidenceintheShari’ahorbyreferencetothepresumptionofpermissibility(ibahah).Atthegloballevel,theFoodandAgricultureOrganizationoftheUnitedNationshaspreparedgeneralguidelinesforuseofthetermhalaltobeadoptedbymembercountries.(Ager,Abdullahetal.)

BasicprinciplesforHalalproducts are:(Malboobi andMalboobi 2012)

Being

Halal

or

Haram

products

is

the

function

of

being

lawful

or

unlawful

with

respect

to

Divine

orders.

Assigning

Halal

or

Haram

depends

on

being

beneficial

or

harmful,

respectively.

In

the

context

of

the

above

concepts,

assigned

orders

in

Shari'ah

are

both

fixed

andvariable

rules

based

on

the

state

of

subjects

on

specific

times

and

places.

Orders

in

Shari'ah

are

ranked based on

the

degree

of

being

beneficial

or

harmful

while

the

best

choice

is

preferred

whenever

itis

necessary.

Some

controls

and

governing

regulations

such

as“Ladirar”

(no

harm

to

human),

Haraj

(the

existence

of

serious

threat

and/or

constraints),

and

urgency

rules

occasionally

disapprove

the

orders.

Therefore,especiallyMuslimsareresponsibletoembraceofthisordermorethananyone.Thisisafaithissueforthem.DuetoitisafaithissueofMuslims,non-MuslimscanneverdealwithHalalandTayyibstandardizationandcertification.Noonecanabusethisfortheircommercialandideology.Non-MuslimscanneverbeinvolvedinHalalandTayyibcertificationastheycan’tbeanimamatthemosqueinprayers.

Itisthusimportantfortheworldcommunity,bothMuslimandnon-Muslim,torecognizethepotentialoftheHalalindustry.Thisisbecausedelvingintoanemergingbillion-dollar industrysuchastheHalalindustrycouldhelptofurtherdeveloptheeconomyjustasitwouldservetosolve someofthelong-standing problemsfacedbytheMuslim community.TherearereasonswhytheHalalindustryisimportanttoworld’sgrowthasamulti-racialsociety.ManyMuslimsandnon-MuslimsconsumersstilldonotunderstandthespiritofShari'ahgoverningtheseproducts.Halalprinciplesarenotconfinedtothestrictlyreligious,butinvolvehealth,cleanlinessandsafety.

This book aims to provide an introduction to applying Blockchain for halal supply chains and outline some potential areas for consideration for the all sectors of the halal industry. The bookwillhelptodeepenunderstandingoftheconceptsofBlockchain technology and halal industry and explores the concept of Halal industry along with the components which constitute the industry. The book Provides and discusses existing halal supply chains usage of Blockchains... The opportunities and challenges in developing and Halal industry are also discussed...

TheHalalEconomyandTheMarketOpportunity

TheglobalhalalindustryisestimatedtobewortharoundUSD2.3trillion(excludingIslamicfinance).Growingatanestimatedannualrateof20%,theindustryisvaluedataboutUSD560billionayear.Thus,makingitone ofthefastestgrowingconsumersegmentsin the world. Theglobalhalalmarketof1.8billionMuslimsisnolongerconfinedtofoodandfoodrelatedproducts.Thehalalindustryhasnowexpandedbeyondthefoodsectortoincludepharmaceuticals,cosmetics,healthproducts,toiletriesandmedicaldevicesaswellasservicesectorcomponentssuchaslogistics,marketing,printandelectronicmedia,packaging,branding,andfinancing.(FleishmanHillardMajlis2011, Dar, Azmi etal. 2013)

Inrecentyears,withtheincreaseinthenumberofaffluentMuslims,thehalalindustryhasexpandedfurtherintolifestyleofferingsincludinghalaltravelandhospitalityservicesaswellasfashion.Thisdevelopmenthasbeentriggered bythechange inthemind set ofMuslimconsumersas wellas ethical consumertrendsworldwide.

Thehalalmarketisnon-exclusiveto Muslims,andhasgainedincreasingacceptanceamongnon-Muslimconsumerswhoassociatehalalwithethicalconsumerism.Assuch,thevaluespromotedbyhalal-socialresponsibility,stewardshipoftheearth,economicandsocialjustice,animalwelfareandethicalinvestment-have gatheredinterestbeyond itsreligiouscompliance.Thepopularityof,anddemandfor,halalcertifiedproductsamongnon-Muslimconsumershavebeenontheriseasmoreconsumersarelookingforhighquality,safeandethicalproducts.

NolongeramerereligiousobligationorobservanceforMuslims,halal(whichmeans“lawful”or“allowable”)hasbecomeapowerfulmarketforce,becomingincreasinglyaworld-widemarketphenomenonforbothMuslimsandnon-Muslimsalike.Theappendageof“Halal”toaproductisnotjustaguaranteethattheproductispermittedforMuslims,butithasalsobecomeaglobalsymbolforqualityassuranceandlifestylechoice.Thisisevidentbytheparticipationandinvolvementofnon-Muslimcountriesandorganizationswherehalalisfastemergingasthestandardofchoice.ManyWesterncountrieshaverecognizedtheemergingglobaltrendinconsumerismtowardshalalproductsandservices,andare nowracingto gain afooting in thehalalindustry.(Dar,Azmi etal. 2013)